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How much will medicines become cheaper due to India-EU FTA, what will be the impact on pharmaceutical sector?

Admin — Tue, 27 Jan 2026 13:51:00 +0000

India EU Free Trade Agreement: The historic Free Trade Agreement (FTA) signed between India and the European Union on Tuesday is expected to have a wide-ranging impact on the Indian economy and consumers. Under this agreement, tariffs on about 90 percent of European products imported into India have either been completely abolished or have been drastically reduced, which may significantly change the nature of the Indian import market in the coming years. It is estimated that this will almost double the presence of European goods in the Indian market and will save about 4 billion euros annually.

What is the impact on pharmaceuticals sector?

Especially the pharmaceutical and healthcare sector will get a big benefit from this, because the 22 percent tariff on chemicals and 11 percent tariff on medicines has been reduced to zero. Apart from this, duty on products like medical, surgical instruments and spectacles has also been reduced by 90 percent, which will reduce the cost of hospitals and treatment can become cheaper for the common people.

According to the Indian Commerce Ministry, the EU will cut customs duties on 99.5 percent of India’s exports over the next few years, including key sectors like marine products, leather, textiles, chemicals, rubber and gems and jewellery. This agreement, reached after two decades of long negotiations, is being considered the biggest trade agreement ever, which will create a common market of about two billion people.

Within three to four years of its implementation, bilateral trade is likely to exceed $200 billion and trade in services is likely to reach $125 billion. India is also expected to gain big in sectors like IT, professional services, education, finance, tourism and manufacturing, especially at a time when India is exploring new global trade options due to high tariffs imposed by the US.

Common market of 2 billion people

Indian exporters are expected to get huge benefits as soon as the free trade agreement with the European Union is implemented. Under the agreement, the EU will completely eliminate import duties on about 90 percent of Indian goods on the very first day, while duties on the remaining about three percent of goods will be phased out over the next seven years.

News agency PTI quoted officials as saying that in this way the EU is giving concessions to India on about 99.5 percent of the trade value. It is believed that this agreement will be formally signed by the end of this year and it is likely to come into force in early 2027, although some provisions may come into effect from the beginning of next year.

On the other hand, India will also make major concessions to the EU, but this process will be relatively slow. India will give duty-free access to about 93 percent of EU goods over the next ten years, while duties will be removed on only 30 percent of European goods on the first day of the agreement.

Apart from this, India will also give duty concessions and quota-based reductions on 3.7 percent of trade value to the EU. Overall, India will receive duty relief on approximately 97.5 per cent of the trade value to the EU, providing a strong long-term basis for trade and investment between the two economies.

Also read: After India-EU FTA, from Olive Oil and plastic to medicines… know what is cheaper in India. complete list

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After India-EU FTA, from Olive Oil and Plastic to Medicines… Know what is cheaper in India. complete list

Admin — Tue, 27 Jan 2026 13:16:44 +0000

India EU Free Trade Agreement: After nearly two decades of negotiations, the Free Trade Agreement (FTA) between India and the European Union has been finalized. Although it will take time for its full implementation and it is expected to become effective from next year, but the benefits of this deal are already in the news. Once the FTA is implemented, tariffs on about 97 percent of Indian products sent to Europe will be zero, which will lead to annual customs duty savings of about $4 billion in trade with the European Union. With this, many products coming to India from Europe will become much cheaper for Indian consumers.

The biggest impact of this agreement will be seen on food items. Currently, there is a 30 to 50 percent tariff on chocolate, cheese, pasta and other food products imported from Europe, which can be reduced to zero in a phased manner after the FTA. With this, these products will be available in the Indian market at much cheaper prices than before.

How cheap is it in India?

products	Current Tariff Rates (in Percentage)	Future Tariff Rates (in Percentage)
aircraft and spacecraft	11	0
Machinery and Electrical Equipments	44	0
Glasses, medical and surgical items	27.5	0
chemicals	22	0
plastics	16.5	0
motor vehicles	110	Quota up to 10 (250K)
iron and steel	22	0
medicines	11	0
beer	110	50
Liquor	150	20 (Premium Range) 30 (medium range)
Olive Oil and Vegetable Oil	45	0
Fruit Juice and Non-Alcoholic Beer	55	0
Processed fruits (breads, pastries, pasta and chocolates and pet foods)	50	0

Big relief on beer and liquor

A big relief is also expected in the prices of liquor and wine. At present, there is a heavy import duty of 100 to 150 percent on European liquor and wine. After FTA, this tariff may come down to the range of 20 to 30 percent, while in some categories it may be further reduced. Consumers will directly benefit from this and premium wine can now become more affordable.

Big changes will also be seen in the automobile sector. Currently, 70 to 100 percent import duty is imposed on European cars in India, due to which luxury cars become very expensive. After the agreement, the tariff on expensive cars can be reduced to about 40 percent in the first phase and further reduction is possible in future. With this, European cars like BMW, Mercedes, Audi will become comparatively cheaper in the Indian market.

Impact on agriculture and dairy sector

Impact will also be seen in agriculture and dairy sectors. Due to reduction in import duty on olive oil, processed food and some dairy products coming from Europe, their prices may come down. At the same time, Indian farmers and agri-exporters will also get better access to the European market, which will boost agricultural exports.

Overall, after the implementation of India-EU FTA, many everyday imported items will be available to Indian consumers at cheaper rates, while the huge market of Europe will become more open for Indian industry and exporters. This is expected to provide relief in prices as well as strengthen investment, employment and trade.

Also read: What will be the next step for the ‘Mother of All Deal’ to become effective?

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India-EU FTA sealed, what will be the next step for the ‘Mother of All Deal’ to come into effect?

Admin — Tue, 27 Jan 2026 11:24:47 +0000

India EU Free Trade Agreement: This historic Free Trade Agreement (FTA) between India and the European Union (EU) is considered very important not only in terms of bilateral trade but also in the global geo-economic scenario. Reaching agreement on this agreement after 18-20 years of complex and sometimes stalled negotiations is an indication that both sides are seeing each other as strategic partners in the changing global situation. At a time when trade relations with the US are facing challenges such as uncertainty and high tariffs, the India-EU FTA will ensure an alternative, stable and reliable market for both.

At present the European Union is India’s largest trading partner and about 17 percent of India’s total trade is with the EU. In the financial year 2024-25, the trade in goods between the two was about 136.53 billion dollars, in which India’s exports were 75.85 billion dollars and imports were 60.68 billion dollars, that is, India got a trade surplus of about 15.17 billion dollars. Apart from this, there was a turnover of about 83 billion dollars in the services sector including IT, business services and telecommunication. A sharp increase in these figures is expected after the implementation of FTA.

Trade expected to increase from FTA

This agreement will prove to be very decisive on the tariff front. According to news agency PTI, import duty on about 93 percent of Indian goods, except automobiles and steel, will be completely eliminated in the European market. There will be either a big reduction in tariff on the remaining products or quota based exemption will be given. Overall, the EU will give tariff concessions to about 99.5 percent of India’s goods. At the same time, India will also reduce its import duties in a phased manner, due to which European products will become relatively cheaper in the Indian market. This will greatly benefit sectors like textiles, leather, engineering goods, pharma, agricultural products and processed food.

The impact of this FTA will not be limited to trade only. Prime Minister Narendra Modi clarified that this is not just a trade agreement but also a new framework for mobility, technology and people-to-people contacts. Under this, the movement of students, researchers, skilled professionals and workers will be easier, which will open new opportunities for education, research and employment. Also, cooperation will be strengthened in areas like clean energy, green hydrogen, semiconductor, digital technology and supply chain resilience.

Defense and security cooperation is also an important part of this agreement. According to PM Modi, this FTA will formalize and deepen partnership in areas like counter terrorism, cyber security and defense co-production. This will not only increase strategic confidence, but the Indian defense industry will also benefit from European technology and investment.

How will the FTA be effective?

However, it will take time for the FTA to be implemented immediately. The European Union must first publish the negotiation draft as a formal text.
It will have to be legally tested and translated into all official languages.
After this, the approval of the European Council and the European Parliament will be necessary.
This agreement will come into force only after completion of all these processes and formal approval by India.

It is estimated that this may become effective from next year. Overall, the India-EU FTA is a huge opportunity for India to increase exports, investment, employment and share in global value chains, while for the EU it opens up access to a huge, young and fast-growing economy in Asia. This agreement is believed to take both sides to new heights of long-term economic partnership.

Also read: Pasta, beer, wine, chocolate… know what will become cheaper in India after FTA with EU

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